Medicaid Financing and Reimbursement - A Research Paper Sample

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957 words
George Washington University
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Research paper
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Medicaid is recognized as the largest health insurance program in America. The program covers approximately 62 million Americans inclusive of the poorest families and individuals in the country (Dorn, 2010). Medicaid is noted to serve as the principal source of health care financing and notably Americans long-term care financing. Medicaid significant expansion started in 2014 with Affordable Care Act (ACA) introduction, and it resulted to covering millions of the uninsured low-income individuals both adults and children (Dorn, 2010).

The Medicaid platform is conjointly funded by both the federal government and the states. The federal government is responsible for paying the states specific percentage of the program's expenditure that is referred to as Federal Medical Assistance Percentage (FMAP). The rate paid by the federal government is based on per capita income. The federal government spends approximately 55%, but the percentage varies with wealthier states getting as low as 50% while the lower per capita income gets about 75% (FOUNDATION, 2013). However, the maximum rate given by the federal government is approximately 82% (FOUNDATION, 2013). Moreover, the FMAP adjusts the funding after a three-year cycle funding to account for fluctuations in the economy. Therefore, the Medicaid state plan is responsible for determining the state payment methodology for the Medicaid services.

Role of the federal and state governments on the operation and design of Medicaid programs

First, the federal and state governments manage the costs and unpredictability in the provision of health and long-term care coverage, especially to the vulnerable low-income American. With the primary focus being to help families who cannot afford medical insurance, Medicaid contributes to offset the increasing number of uninsured in the US through the financial structure provided by the federal and state governments (By Victoria Wachino, 2004). Second, both the federal and states government are responsible in sharing of the risks. The federal government is in charge of the biggest percentage while the state contributes an amount to give the state an incentive to manage the program and be able to control the costs. Third, the state law may assign some functionality of the Medicaid programs to the state government example eligibility determination and service delivery like child immunization and public health. Fourth, there are some countries with big manageability scales like New York and California. These states are significantly large regarding geographic distance and population, and the state government may better handle the management in place of the federal administration (FOUNDATION, 2013). Fifth, regarding political considerations, the state government is in a better position to respond to managed care functionalities, and it is only appropriate and prudent to acknowledge that some of the concerns raised regarding Medicaid are directed to the state government especially when there is the need for managed care decision making (Dorn, 2010).Lastly, regarding preservation of traditional safety net capabilities, the states governments are in a better position to ensure the safety net of local public hospitals, mental health centres, and clinics. The federal government is noted to be the largest contributor of funds, but they are not directly involved in the state decision making, most of the capabilities are charged to the state governments. Moreover, the state governments have a direct impact on the beneficiaries of the Medicaid given they are in constant link with the locals. There is also a possibility of the state governments to operate social and non-health services, and they may be in a better position to link Medicaid managed care beneficiaries to the local providers as opposed to the federal government who may not have a direct connection with the local medical providers (By Victoria Wachino, 2004).

Impact of the Patient Protection and Affordable Care Act on the eligibility and coverage for Medicaid.

The Patient Protection and Affordable Care Act (PPACA) together expand the Medicaid coverage to millions of low-income Americans as many of them are not able to afford medical insurance cover. The extensive coverage is ensured by the provision of comprehensive health insurance reforms that guarantee: lower health cost, enhancement of quality of care for all the American patients, hold insurance companies responsible and offer choices to the patients regarding their medical programs (FOUNDATION, 2013).

Secondly, there is state that will save significantly in their Medicaid bills with collaboration with PPACA. Ensured in three distinct ways; there are states which spend less as PPACA offers to subsidize reinsurance for early retires especially those formally employed by states and localities (Dorn, 2010). Two, PPACA helps the states to save money with the disabled and elderly by permitting greater integrating of funding and dual eligible. Three, the states that cover parents between 133 and 200 % of the FPL have the capability to shift these federal funding by implementing PPACA which then converts PPACA tax credits to the funding of contract with health plans that sere adults in this income range (By Victoria Wachino, 2004).

Thirdly, PPACA generates huge gains for the state governments through Medicaid as well as economic growth which results from federal taxes, higher health care spending and the losses to providers. In conclusion, Medicaid platform on financing and reimbursement is well balanced with contributions from the federal and state government. With the different roles assigned to each state, the Medicaid program has managed to work correctly with the Patient Protection and Affordable Care Act (PPAC) in the majority of the states (Dorn, 2010).



By Victoria Wachino, A. S. (2004). Financing the Medicaid Program: The Many Roles of Federal. kaiser commission on medicaid and the uninsured, 47.

Dorn, J. H. (2010, June). Timely Analysis of Immediate Health Policy Issues. What Is the Impact of the Patient Protection and Affordable, p. 5.

FOUNDATION, T. H. (2013, March 1). Medicaid: A Primer Key Information on the Nations Health Coverage Program for Low-Income People. Retrieved from KFF:

Verdier, J. M. (1999). THE ROLE OF LOCAL GOVERNMENTS IN MEDICAID MANAGED CARE:. New Jersey: Princeton, .

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